How Effective is Your Organization?

Reaching $1 billion in sales is a major feat for aspiring companies. It’s a roller coaster ride of ups and downs. Navigating that journey takes a cohesive team. It means everyone in the organization, especially its leaders, must constantly raise their skill and performance levels. The easiest way to accomplish that is to create a culture that does it naturally. Successful organizations are mavericks about how they design and organize their business, focusing on what motivates their people to grow and perform at their best, in a way that the competition can’t replicate. What’s involved?

Organizational Effectiveness – how well, given its resources, the organization meets its goals or objectives. In order to achieve a high level of effectiveness, all the members of the organization must demonstrate fairness, honesty, integrity and respect for one another. This creates a high level of trust, which in turn enables open communication and high levels of collaboration. Organizational Effectiveness is driven by organizational culture and effective leadership behavior, it’s the combination of those two factors that most strongly influence overall organizational performance.

Organizational Health – is the ability of an organization to align, execute, and renew itself faster than its competitors, which is just as important as focusing on the traditional drivers of business performance. Organizations that focus on performance and health simultaneously are twice as successful as those focused on performance alone. The key to long-term success is to empower and develop your people to unleash their enthusiasm, creativity, and commitment to propel the business forward. Organizational health includes all the human elements required to achieve sustainable success. Companies typically only tap into a fraction of the knowledge, experience, and intellectual capital that is available to them. What’s your utilization rate? Could it be better?

Designing a more effective organization could include an organizational structure that looks something like this:

An Organizational Structure that behaves more like an entrepreneurial enterprise is the best of both worlds, including the depth of skills and resources of an enterprise combined with the high customer focus and flexibility of the entrepreneurial mindset. Where the organization creates a trusting environment with open, honest, and respectful communication, an environment where everyone is safe to challenge the status quo. Cohesive teams that resist group think, with people who speak-up when they see potential problems and well before a bad situation gets out-of-hand, where employees learn from one another, identify critical issues, and recover quickly from mistakes.

The business simply gets the best out of the talent that they have and don’t allow dysfunctional behavior get in the way. They empower ordinary people to do extraordinary things. How employees feel about the place they work is a significant driver of success. People want to see that their contribution matters.

The Competitive Advantage for companies in the 21st Century will come from hard-to-copy intangible assets such as company culture and leadership effectiveness. It’s easy to clone products or services but impossible to copy a company’s culture because every individual in it is unique. It’s easy for leaders to focus on fighting fires and lose sight of consciously crafting a thriving culture. Companies that have realized the greatest breakthrough success have designed unique cultures that engage and invigorate employees, customers, and other stakeholders. It’s easier to do than you might imagine, particularly since this approach engages employees and helps them realize their full potential.

A Study of Breakthrough Companies revealed important characteristics such as:

The needs of the company were placed above all else, by the owners, the employees, individually and collectively.

Customer needs were put first.

The companies had bold visions. Their leaders were determined to build something bigger than themselves.

Leaders understood that they were paid to serve the organization, not the other way around.

The leaders were able to shift their leadership style from commander to coach.

Employees whose skills could not keep pace with the organizations’ growth were reassigned, including the owners.

Employees shared in the success of the organization.

Built an atmosphere where people are encouraged to question fundamental assumptions at any time.

Anyone could speak to anyone else in the organization at any time.

Developed internal capabilities (people/processes/systems) to support organizational growth.

Identifying and acting on the right risks. Taking increasingly bigger risks and reaping the rewards to fuel growth.

Used tough times to focus on the most important initiatives and tap into employees’ inner strengths.

Balanced between giving customers what they want, quickly responding to the marketplace, and keeping costs low.

Capitalized on outside resources and ideas to help to take their organizations to the next level.

Gain competitive advantage with an Organizational Design that creates an environment where:

The leaders evolve as the business evolves, transitioning from the multitasking entrepreneur to someone who shares responsibilities and coaches their team to stretch and grow to meet the ever changes needs of the organization. Leading by example in putting the needs of the organization above all else.

Employees are highly motivated to be a part of something that is bigger than any one person. By an organization with a vision that aspires to make our world a better place, with a clear and well-articulated strategy, where employees can easily see how their role fits into the bigger picture. It gives employees a sense of purpose and connection to a value system that mirrors their own, creating an environment that attracts the best talent.

Customer Centric – Achieve real competitive advantage by keeping your entire workforce focused on your customer. Stay focused on adding value rather than generating “bad” profits (fees and penalties that generate revenue but alienate customers like those seen in the banking, telecom, and airline industries).

Management methods and processes that encourage the right behaviors, empowers employees to do their best work and strive to realize their full potential. Create an environment conducive to forming cohesive teams. Establish effective and open communication with continuous feedback to instill trust and accountability.

Hire who you can afford and then developthem so they have the right skills when you need them. Create an environment where ordinary people can achieve extraordinary things, by giving them the skills and the tools they need to succeed.

Create an employee pipeline so that someone is always learning and training to move into a new position in the organization. Doing so also gives employee’s growth and advancement opportunities and motivates them to stay and grow with the company.

Instill a lifelong learning mindset in your organization and incorporate informal learning practices into everyday routines. The best knowledge retention happens when people learn in chunks that are reinforced through reoccurring activities. Take advantage of every situation, whether it’s good or didn’t end well, and use it as a learning opportunity.

A learning mindset also leads to continual performance improvements in people, processes, and systems.

Organizations that learn are more creative and innovative empowering them to keep finding new sources of value and capture them more quickly than the competition.

Dynamic Capabilities – Self-renewal – Adapt or Die –– We must be forward thinking, actively manage uncertainty, instill business practices that ensure better decision making capabilities, and continuously scour the landscape in search of opportunities, identify the right risks, and redeploy resources, as needed, to continuously adapt to the changing environment and customer needs.

Maximize resources by uncovering hidden assets and getting the best use out of existing tangible and intangible assets is essential. Identifying and utilizing employee knowledge, experience, and skills beyond what they were hired for is one example. Others include knowledge, data, and relationships that organizations naturally accumulate over time and take for granted and could leverage for an additional revenue stream or provide a strategic pivot point. We need to become experts on capitalizing on relationships and combined capabilities.

Relationship Capital – in addition to having great relationships with employees and customers, companies gain significant competitive advantage by seeking knowledge and advice from sources outside the company. By working with others to develop products and services that provide comprehensive customer solutions that an individual company would not be able to achieve alone. Walmart and P&G have profited from it and you can too! Employee growth opportunities can also be realized through relationships with educational institutions. The possible combinations are endless with infinite opportunities.

While this may all seem like commons sense, sadly, it’s not common practice. How we organize and treat people really matters. One person alone can’t create, build, and sustain a billion dollar organization. It takes a team working in concert with one another and the world around them…